Research On The Mechanism Of Chinese Style Fiscal Decentralization And Fiscal Transfer Payment On Common Prosperity

Common prosperity is the essential requirement of socialism and an important feature of Chinese modernization.As socialism with Chinese characteristics enters a new stage of development,it must adapt to the changes in the major social contradictions in China and better meet the people’s growing needs for a better life.We must firmly promote common prosperity.At present,China’s regional and urban-rural development is still uneven,uncoordinated,inadequate and other problems are still prominent.Regional economic disparities and urban-rural income disparities are still important factors affecting the process of common prosperity in China.As the foundation and important pillar of national governance,finance not only undertakes important responsibilities in optimizing resource allocation,maintaining market unity,promoting social equity,and achieving long-term stability of the country,but also shoulders major missions and responsibilities in the process of solidly promoting common prosperity.In the process of promoting common prosperity,we must play a good role in finance.Therefore,it is of great theoretical and practical significance to deeply study how public finance can promote the realization of common prosperity and clarify the channels and mechanisms of public finance’s role in common prosperity.Fiscal decentralization is an important part of the national governance system and governance model,and is a major background for the study of the relationship between public finance and common prosperity.Fiscal decentralization is the distribution and institutional arrangement of public resources between the central government and local governments,mainly involving the power and responsibility of fiscal revenue and fiscal expenditure.Under different financial decentralization institutional arrangements,the central government and local governments have different financial powers and expenditure responsibilities,and different types and models of decentralization have different impacts on the overall economic and social development.After years of reform and development,China has formed and gradually established a decentralization model with typical Chinese characteristics,which is called "Chinese style fiscal decentralization model" in this paper.Under the Chinese mode of fiscal decentralization,due to the regional economic development gap and the institutional arrangement of fiscal decentralization,fiscal imbalances are widespread,and fiscal imbalances can be divided into vertical imbalances and horizontal imbalances,which respectively refer to the imbalance of the financial capacity between the central government and local governments and the imbalance of the financial capacity between local governments.Under the background of Chinese fiscal decentralization and the resulting fiscal imbalance,exploring the relationship between transfer payment,a core policy tool,and regional economic development gap and urban-rural income gap has become the focus of this study.Taking the regional economic development gap and the income gap between urban and rural residents as the starting point,the paper brings common prosperity into the research field of vision,so as to organically combine the two themes of fiscal decentralization and common prosperity,and explore the impact mechanism and action mechanism of transfer payment,the core financial tool,on common prosperity under the conditions of financial vertical imbalance and horizontal imbalance caused by the Chinese fiscal decentralization system,On the basis of the relevant conclusions,the paper puts forward relevant policy recommendations.Firstly,the paper summarizes fiscal decentralization and common prosperity respectively,reviews the evolution process of fiscal decentralization and the change process of common prosperity in China,reviews the literature,and puts forward the characteristics of Chinese fiscal decentralization.Secondly,the paper theoretically answers the influence way and mechanism of Chinese fiscal decentralization and transfer payment on common prosperity,which is the core of the paper and the theoretical basis of empirical research.Thirdly,from the perspective of fiscal vertical imbalance and horizontal imbalance,the paper makes an empirical test on the above mechanisms,and further clarifies the quantitative relationship between transfer payment and regional economic development gap(measured by Gini coefficient and Thiel index)and urban-rural income gap.In order to further enrich the research content of the paper and support the relevant research conclusions,the paper also conducts empirical analysis from two aspects: the spatial effect of transfer payment and regional economic growth,and the impact of transfer payment on the equalization of county financial resources.Finally,focusing on the reform and improvement of the transfer payment system and institutional mechanisms,the paper puts forward countermeasures and suggestions to optimize the Chinese fiscal decentralization system,narrow the regional gap and urban-rural gap,and promote common prosperity.The innovation of the paper is mainly reflected in four aspects.First,it defines the Chinese style fiscal decentralization,and summarizes and refines the four characteristics of the Chinese style fiscal decentralization,namely,the Chinese style fiscal decentralization is a decentralized system that combines political centralization with economic decentralization,the Chinese style fiscal decentralization is a highly centralized system of tax legislative power and collection and management power,and the Chinese style fiscal decentralization is a decentralized system that constantly promotes the matching of intergovernmental powers and expenditure responsibilities,The important goal of China’s fiscal decentralization reform and improvement is to promote common prosperity.Second,the analysis framework of common prosperity is expanded,and the analysis of common prosperity is divided into regional economic development gap and urban-rural income gap.Third,it is also the core innovation of this paper.It analyzes and puts forward the influence way and mechanism of Chinese fiscal decentralization and the resulting fiscal transfer payment on common prosperity.In view of the regional income gap,there are three major influence ways and mechanisms: first,the role and impact of local government behavior on local economic development under the vertical imbalance between central and local finance;Second,under the condition of horizontal fiscal imbalance among local governments,the role and impact of local government competition on regional economic development gap;The third is the role and impact of transfer payment on regional economic development gap through transmission.For the urban-rural income gap,there are two major impact ways and mechanisms: first,the local government expenditure structure has an impact on the urban-rural income gap;Second,the local government’s investment preference of emphasizing cities over villages has an impact on the urban-rural income gap.Fourthly,the empirical analysis is relatively rich,which not only verifies the impact channels and mechanisms,but also tests the relevant spatial effects.Taking Shanxi as an example,it quantitatively analyzes the impact of transfer payments on the equalization of county financial resources.In general,the paper has a certain theoretical value and application value.From the perspective of theoretical value,the paper puts the Chinese style fiscal decentralization and transfer payment and common prosperity under the same framework for research,and expands the analysis framework of common prosperity into two major aspects:regional economic development gap and urban-rural income gap.These studies are also of positive significance for enriching the theory of socialism with Chinese characteristics and enhancing theoretical confidence and road confidence.At the same time,the paper proposes and verifies the influence way and mechanism of fiscal decentralization and transfer payment on common prosperity,which also plays a positive role in further enriching China’s fiscal decentralization theory and expanding the theoretical understanding of how public finance can promote the modernization of national governance capacity.From the perspective of application value,the paper focuses on how to give play to the enthusiasm of the central and local governments,and systematically puts forward relevant policy suggestions in terms of reforming and improving the Chinese style fiscal decentralization system,optimizing the mode of fiscal transfer payment,and promoting the overall improvement and equalization of regional and urban and rural public service levels,It has certain reference and reference significance.